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2013 (11) TMI 1619 - AT - Income TaxTDS u/s 194J - non deduction of tds - Held that - As per the agreement entered into by this assessee with the concerned Authority it is a compulsory payment to be made as a reimbursement. On this amount, obviously Section 194J is not applicable
Issues:
1. Disallowance of consultancy charges under section 40(a)(ia) of the I.T. Act. 2. Disallowance of hire charges under section 40(a)(ia) of the I.T. Act. Issue 1 - Disallowance of Consultancy Charges: The department appealed against the CIT (A)'s order deleting the disallowance of Rs. 26,74,200 under section 40(a)(ia) of the I.T. Act for non-deduction of TDS on consultancy charges. The issue was whether the payment was purely for consultancy or reimbursement of costs. The Tribunal noted that a similar issue was decided in favor of the assessee for the A.Y. 2007-08. The Tribunal cited that the payment was reimbursement under an agreement, not subject to TDS. Consequently, the Tribunal dismissed the department's appeal based on precedent. Issue 2 - Disallowance of Hire Charges: The department contested the deletion of Rs. 38,19,669 under section 40(a)(ia) of the I.T. Act for non-deduction of TDS on hire charges. The Tribunal referred to a previous decision in favor of the assessee for the A.Y. 2007-08. It was established that the expenses were paid before 31/03/2007 for truck hiring, not subject to TDS under section 194C. Following the Special Bench's decision, the Tribunal ruled in favor of the assessee, aligning with the CIT (A)'s decision based on the Merilyn Shipping & Transport case. Consequently, the Tribunal dismissed the department's appeal on this ground as well. In conclusion, the Appellate Tribunal ITAT JODHPUR upheld the CIT (A)'s decision and dismissed the department's appeal regarding the disallowance of consultancy charges and hire charges under section 40(a)(ia) of the I.T. Act. The Tribunal's rulings were based on previous decisions and legal interpretations, resulting in the department's appeal being dismissed on both issues.
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